UUrbaser v Argentina: The Origins of Host State Human Rights Counterclaim in ICSID Arbitration

Abstract

Investment arbitrations have their own challenges due to their asymmetric nature, which arise from the essential difference between the parties to the claim. The investor on the basis of the investment agreement can bring a claim against the host State, but on the contrary, the counterclaim by States for changing the current process of investment arbitration, in which the ultimate conviction is usually for the State, faces with a number of fundamental challenges. This is due to the non-anticipation of the possibility of counterclaim by States and the difficulty of imposing the obligations of international law on investors. These gaps along with the possibility of violation of human rights by the investor, ultimately, lead to non-compensation of third-parties, who are in many cases the direct victims of human rights abuse in this process. Urbaser v. the Argentina is the first ICSID case which the ICSID arbitration tribunal accepts a counterclaim of a State based on human rights violations and puts it into detail analysis; although finally the State remained unable to prove its claim, and the counterclaim had been rejected in merits.

Keywords

• counterclaims in investment arbitrations
• corporate social responsibility
• corporate obligations under international law
• right to water
• icsid